Sarkozy - the new Napoleon

As a former activist in the French Socialist Party, it pains me to welcome the success of a right-wing populist in the first round of the presidential election. But I think that a Nicolas Sarkozy victory may be the best outcome for France and for Europe. So long as France remains the sick man of Europe, the EU's potential to achieve anything - political or economic - is severely limited. Sarkozy may have the ambition, intelligence, energy and determination that are required to heal some of France's economic malaise.

The French economy is sick: it is the slowest-growing in the EU (bar Portugal), its record on job-creation is abysmal, and its over-weaning state smothers entrepreneurial dynamism. France's best companies have remained world-leaders only by shifting production elsewhere. Understandably, the huge numbers of French people dependent on state salaries, benefits or pensions want to preserve a system that offers so few opportunities to those excluded from it. If France continues on its current path - inward-looking, lacking confidence in its future, and seeing globalisation as a threat - it is likely to push the EU towards protectionism, and block attempts to reform EU institutions or farm policy.

Sarkozy scares many French people because he clearly wants change. He is angry about France's economic decline in recent decades. Any politician who calls for a "rupture" with the past is bound to unsettle those in privileged positions, such as workers in unreformed public sector institutions - which is why his victory in the second round of the elections is far from assured.

I am not sure that a President Sarkozy would succeed in turning around France's economic fortunes. At the Ministry of the Interior he has displayed an almost super-human energy - but energy alone can achieve little, unless focused on clear objectives. His recent book, Testimony, shows a clear analysis of what is wrong with France, but is weak on remedies to solve the country's structural economic problems (see my review of Testimony in Prospect magazine). Sarkozy would certainly try to liberalise France's labour market, soften the excesses of the 35-hour working week, and improve incentives for businesses. And he would probably display the courage necessary to take on some privileged interest groups. However, to judge from his rhetoric, he is no more a free trader than Jacques Chirac: he promises to prevent foreign takeovers of French firms, and to foster the creation of French and European champions.

But it is certainly possible that Sarkozy would give the French economy the kick up the backside that it needs. There seems absolutely no chance of Ségolène Royal doing that. She is the continuity candidate, while Sarkozy wants a radical break. She promises the French people that they can have reform without pain. She would be as protectionist as Sarkozy - or more so - but do little to reform the French state or encourage the private sector to create jobs. She is the candidate of the most conservative and unreformed socialist party in the EU, and the one that is most hostile to economic liberalism. That would constrain her freedom to promote economic reform - even if she wanted to, which she may not.

In the short run, this election may not have much impact on the EU. Both candidates would defend French interests vigorously, though on the Common Agricultural Policy both would probably be a little less hostile to reform than Chirac.

Royal would create problems for Chancellor Angela Merkel's attempt to push through a revision of the EU treaties, for she has demanded that the new document be more 'social', and that it should be put to French voters in a referendum. As those voters showed two years ago, a referendum in one country can prevent the whole EU from moving forward. Sarkozy, like most EU leaders, argues that the modest treaty changes proposed by Merkel should be accepted, and then ratified by parliamentary vote rather than referendum.

But Sarkozy would create problems with his strong opposition to Turkish membership of the EU, which Royal does not share. If President Sarkozy blocked the accession talks with Turkey, it could not only destabilise Turkey, but also damage the EU's standing in the Islamic world. However, he might in the end listen to the pleadings of the British, German and US governments, which would ask him to let the talks continue, even if he continued to oppose the ultimate goal of membership. In any case Turkey is unlikely to be ready to join the Union before the end of Sarkozy's second term (which would be in 2015, if he wins two consecutive presidential elections).

In the long run, Sarkozy could make a positive impact on the EU. If he can get the economy moving, so that the French become less fearful of change - whether economic reform, trade liberalisation, enlargement or new treaties - then France can return to playing its traditional leadership role in the EU. Europe needs France to play that role. Others countries may try to take the lead, as has happened in the past two years, but then France is likely to sit on the sidelines, sometimes blocking the initiatives of others. France plays a more constructive role when in the driving seat, than when a back-seat driver.

If the French choose Sarkozy, they will be acknowledging that France is in a hell of a mess, and that they need an unusual sort of leader - in this case, a populist with a bit of a Napoleon complex (like the Corsican, he is a hyper-active, rather authoritarian, diminutive outsider) - to sort it out. But despite his populism, Sarkozy has had the honesty to state clearly that France should not blame the EU or globalisation for its problems: he says in his book that it should only blame itself. The election of Sarkozy could lead to France embracing long-needed reforms, which, if successful, should make it easier for the EU to change for the better.